Brynwood
considers
options for
Stella D'oro

Brynwood defends actions in Stella D'oro battle

By Richard Lee, STAFF WRITER

Published 2:34 am, Tuesday, September 1, 2009

Brynwood Partners, Greenwich-based owner of the Stella D'oro Biscuit Co., said Wednesday it is studying all its options regarding the future of the bakery operation in the Bronx, N.Y., where 136 striking employees recently returned to work after winning a decision by a federal administrative law judge over unfair labor practices.

In a statement, the company said that negotiations with Local 50 of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union failed to result in any wage or benefit concessions, forcing it to exit the business.

The union mistakenly has assumed that Stella D'oro is considering outsourcing its production, Brynwood said.

Related Stories

"While this is one of the strategic alternatives available to the company, other strategic alternatives include selling the business as a going concern, selling the business to a buyer with its own manufacturing capabilities, or permanently closing the plant and selling off the company's assets," Brynwood said in its statement.

After Brynwood bought Stella D'oro in 2006 from Kraft/Nabisco, the business experienced its first sales increase in 15 years, but it has had more than $3 million in operating losses since 2006. Brynwood attributed much of the problem to the labor cost structure.

"With wages and benefits, the annual cost to company of a Stella D'oro cookie packer exceeds $65,000 per year," said Brynwood, which asked for union givebacks of about $400,000 before the strike that started last August, but got none.

The company continued production by employing replacement workers.

Local 50 is waiting to see how the National Labor Relations Board reacts to its charges that Brynwood is acting illegally in its decision to close the Bronx, N.Y., bakery.

In response to the ruling that Brynwood engaged in unfair labor practices in dealings with striking union workers, the private equity firm said July 6 that it planned to shut down the bakery in 90 days. Brynwood is appealing the law judge's ruling to the five-member NLRB, a process that could take more than six months.

Local 50 has voiced concern that Brynwood plans to transfer production.

The union has moved to block the shutdown, petitioning Celeste Mattina, regional director of the NLRB, to ask a federal judge to issue an injunction to stop the closing.

Local 50 is demanding that contract negotiations be reopened.

"We cannot allow the private equity predators at Brynwood Partners to ignore the law," Joyce Alston, Local 50 president, said in a statement. "The company cannot simply ignore the decision of a federal administrative law judge, and it cannot punish the workers at Stella D'oro for exercising their rights under the law by filing unfair labor practices, winning their case and conducting a 10-month unfair labor practice strike in defense of the law."

The U.S. Supreme Court has ruled that the NLRB cannot prevent a company from shutting down a business, Leach said, but it can take action if a company opts to move an operation in reaction to a union work force.